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The think tank has alleged that Whatsapp is conducting trial on their payments app without complying with RBI norms.
An application has been filed in the Supreme Court seeking a complete stoppage of the trials being conducted by WhatsApp Pay, the pilot mobile payments project being floated by Facebook.
Filed by Centre for Accountability and Systemic Change (CASC), the application alleges that WhatsApp has been continuing beta testing on its payments system on 1 million users in violation of data localization norms in India.
The violation of these norms would lead to the conversion of one million Indian users into guinea pigs for testing the viability of WhatsApp Pay, as alleged by the petitioners in their application.
CASC had filed a writ petition before the Supreme Court in 2018 to ensure that WhatsApp complies with the data localization norms as mandated by the Reserve Bank of India (RBI) in its circular issued in April 2018.
WhatsApp claimed that it had received permission to conduct trials of its payments services app in February 2018, before the RBI Circular on data localization norms came out in April 2018. It is the case of CASC that since WhatsApp has not been complying with the data localization norms issued by the RBI, the trials that are being carried out are rendered completely illegal.
The Supreme Court had directed the RBI to submit a report on the compliance of these norms by WhatsApp. In the affidavit filed as a response, it had been clarified that WhatsApp was not complying with the said norms.
CASC has alleged in the application that any go ahead to WhatsApp without complying with these norms would be of a "suspicious nature" and the Court should issue directions against the same.
The application also cites a news reports saying “WhatsApp may get to roll out payments services in phases”, published in the Times of India.
The think tank has also alleged that the FAQs issued by the RBI with regard to the data localization norms attempt to tone down the statutory compliance created by Section 19 of the Payments and Settlements Systems Act, 2007, which mandates the compliance of these RBI guidelines.
WhatsApp has failed to put on record the the permission granted to it for carrying out the trials and have falsely claimed compliance with the RBI norms, even though the affidavit submitted by RBI states otherwise, submits CASC.
The application filed through Advocate Archana Pathak Dave also makes a reference to the Pegasus Spyware incident and the need for having secured data systems. Since WhatsApp and the entire Facebook Group was recently compromised by the Pegasus virus, the data of a large number of Indian users is being put at risk, it is contended.
CASC has thus sought interim relief in the form of stopping the trials and seeking all the communications between the RBI and WhatsApp and National Payments Corporation of India (NPCI) to be placed on record.
[Read the Application here]